It’s time to follow up on Gary Stevenson, the former City trader who became an economist and anti-inequality campaigner.
Last time, I shared Gary’s contributions to the BBC’s Politics Live via a YouTube clip that became extremely popular, with more than 140,000 views as I type this. Rest assured, there will be more content on YouTube in the future!
Now, Gary himself has shared what he himself took from his experience on the show, with which I’d like to couple his more recent clip, What is money? Together, I think they may explain why it’s so important that we find out who has the £700 billion that Boris Johnson’s government has splurged, and find a way to get them to spend it back into the economy or tax it off of them.
Here’s the first clip:
So: an enormous amount of money has been transferred from the government to the richest people in the UK, leading to a huge increase in government debt which triggers austerity, and a big increase in cash accumulation by the richest, leading to inflation and a cost-of-living crisis. The reasons for that are below.
Nobody in government seems to know where the money has gone – £14,000 for every adult in the UK. I don’t have 14 grand. Do you? Who’s got it, then? And what are they doing with it? They don’t want to say it has gone to the richest people in the country.
And they definitely don’t want to admit that their decision to hand over that money has forced you into extreme poverty!
That money could be put to good use, if the people who have it spend it back into the economy, one way or another. What did we get for it? Was it worth the cost? If not, something needs to be done.
Here’s the other clip:
Money is created by central banks and loaned out to others – so for every penny anybody has, there is a penny of debt somewhere; the total amount of money, minus the total amount of debt, always equals zero.
So if one group of people – like a government – goes heavily into debt, somebody else must be accumulating money or credit.
(The government then has to pay interest on the debt, and in a closed system, that means taxing more out of the economy than it put in; this is a way of regulating the money supply, of course. Commercial banks that borrow from the central bank would charge higher interest than it does when they make loans, in order to make their profit – meaning they rely on the system putting you into debt.)
We know that the government spent – splurged – £700 billion during and after Covid – £14,000 per UK adult. But every UK adult hasn’t had £14,000 from the government; somebody else had it.
People who are in debt – including governments – need to get money back from people who are in credit, otherwise they can’t balance their books. Until they can manage such a feat, that debt creates austerity – it harms public sector pay and public services don’t get the investment they need.
The problem is that only a small number of people are in credit, while the government – representing all of us – and a lot of others are in debt. There’s an imbalance between the large number of people owing money and the small number who have it, and (by the way) can lend it, and can therefore demand interest from the people to whom they lend it, in the same way a bank can.
So now, not only do we have a huge amount of government debt to pay off, but we may have private debt as well, because the cost of living has risen.
And why has the cost of living risen?
As Gary said, there has been a massive increase in asset prices: both gold and shares have hit (by now, I think) an all-time high, and that’s because rich people have been buying them up, with a view to profiting on them – because they have so much money, it won’t hurt them to invest much of it.
This creates scarcity, and that pushes up prices, meaning that ordinary people cannot afford to buy as much as they could before. The amount of resources available within the economy is the same, more or less, but fewer people can take advantage of it because the redistribution of money means they can’t afford it.
We have seen a resource run low – gas – and that has simply piled extra pressure on the poor.
We have a government that is not interested in resolving its £700 billion debt. Instead, it is planning to spend even more. So prices will continue to rise and living standards – for the majority – will continue to fall.
And that is why the current Conservative government has presided over the largest increase in inequality in UK history.
It occurs to This Writer that pushing huge debt onto the vast majority of the population may have been government policy all along.
Expect (probably) a video clip in the near future, explaining why.
Have YOU donated to my crowdfunding appeal, raising funds to fight false libel claims by TV celebrities who should know better? These court cases cost a lot of money so every penny will help ensure that wealth doesn’t beat justice.
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